Birla Sun Life MF steps gingerly into Gold ETF

At a time when every other mutual fund company in the country is desperately trying to launch its Gold Exchange Traded Fund (ETF) as fast as they can, Birla Sun Life Mutual Fund is taking stepping gingerly towards launching its product.

At present the company is studying the other companies' experience with their Gold ETF product so that they can come out with a better and refined product. The company is also planning to open up 25 to 30 more branches across the country by doubling its infrastructure.

Jayesh Gandhi, a fund manager of the firm told Business Standard, "We are not in a hurry to launch our Gold ETF product as we are observing and analysing the performance of other companies' Gold ETF products. After analysing the performance of these companies which have launched their Gold ETF products we plan to modify our products according to the investors' requirements and then come out with a refined product in the market."

The company has already applied for its Gold ETF in SEBI and is awaiting the approval. "The company can launch its Gold ETF in a month or two if it wishes to. It could even take six months to a year," Gandhi said.

On expanding the infrastructure of the company, Sidharth Damani, zonal head West -1, told Business Standard, "We will double our branches in the country. At present we have 30 branches and we are planning to open another 25 to 30 branches. In Gujarat we have one branch each in Ahmedabad, Vadodara and Surat. We will add three more branches, one each in Rajkot, Jamnagar and Valsad."

However, when asked by what time the branches are scheduled to come up, Damani said, "We want it to come up as soon as possible but it takes time for implementation. We are hopeful that it will come up within the present fiscal year."

The company also launched its Birla Long Term Advantage Fund Series I in the state. Talking about the product Jayesh Gandhi said, "Birla Long Term Advantage Fund Series I, is a 3-year closed-ended equity fund. The objective of the fund is to generate consistent long-term capital appreciation by investing predominantly in equity and equity-related securities of companies considered as small and mid-cap."

"The fund would invest in a portfolio of attractively-priced small and mid-cap stocks that are expected to post attractive growth in the next few years."

"The situation is ideal for investors to invest in the small and mid-cap companies as the market status is bearish. Stock prices of many companies have gone down in the recent market fall. However, the companies have a bright future and the prices will rise during the forthcoming years. As per our analysis there are around hundreds of small and mid-cap companies whose future is bright. However, the mutual fund companies offering open-ended mid-cap products do not invest in these companies as there is a lack of proper analysis of these companies."

"After the recent slack in the market the returns of large cap companies and, small and mid-cap companies are almost equal," Gandhi said. "This product being a closed-ended product the companies which we are going to invest will have enough time to grow. The product has a thre-year lock-in period," Gandhi added.